GameStop fell by 18 percent in the early trading after the predictions stating that the sales will tumble this year. This is the evidence proving that the company is struggling to adapt to the latest changes and transformation that is happening in the industry.
The retail chain projected on Tuesday that their sales will drop in the range of 5 to 10 percent this year. Though GameStop is incorporating some of the cost-cutting measures as a part of their turnaround plan, the investors are not so confident about it. The stock of GameStop has fallen to $8.70 in the pre-market trading. This adds to the twenty percent decline in the stock price so far in 2019.
GameStop has been the largest independent retailer in the video games for a long time now, but the company is unable to keep up with the pace of this fast-changing industry. The gamers once used to rely on the brick and mortar stores for purchasing the consoles and discs, but now the situations have changed, and they are able to get anything with just a click.
Last month, both Apple and Google announced that they are launching online gaming services. On Tuesday, the Activision Blizzard said that they would offer the battle-royale version of their famous Call on Duty game free for one week online in the month of April.
All these situations have increased the pressure on the management of GameStop. The company made an agreement with two activist firms who are seeking to get on the retailer’s board. GameStop will add two active board members from Permit Capital Enterprise Fund and Hestia Capital Partners.
GameStop’s comeback plan is to cut the costs as much as they can. The company is planning to achieve $100 million in improvements in operating profit by the end of 2019.